A 'Done Deal' to Help Florida Tracks
by Jim Freer
Date Posted: 4/20/2010 9:30:53 PM
Last Updated: 4/21/2010 9:20:20 AM

Hialeah Park is one of the tracks that will benefit from the Florida Bill.
Photo: Eliot Schechter

The Florida House passed a bill April 19 that provides some long-sought benefits for portions of the state’s Thoroughbred industry. The bill also establishes a gaming compact with the Seminole Tribe of Florida, under the terms of which it will pay a share of its slot machines and card revenues to the state.

Because the Senate's approval its version of the bill (S.B. 622) on April 15, members of the legislature and Thoroughbred industry officials are now saying they have a “done deal”—following several years of bargaining and debate.

Once Gov. Charlie Crist signs the bill, which he said on April 19 said he plans to do, the following changes would take effect July 1, 2010:

* The state tax rate would drop from 50% to 35% on revenues of the Class III Las Vegas-style slot machines at Gulfstream Park, Calder Casino & Race Course and three other pari-mutuels in the southeast Florida counties of Miami-Dade and Broward,

* Hialeah Park, in Miami-Dade, would be eligible to build a casino with Las Vegas-style slots provided it continues to run annual Quarter Horse meets,

* The Ocala Breeders’ Sales Co. would be able to hold an annual not-for-profit Thoroughbred meet,

* Holders of Quarter Horse permits, including Hialeah and Gulfstream, could hold night racing meets with as many as half of a meet’s races for Thoroughbreds,

* Poker rooms at pari-mutuels throughout the state could be open 24 hours a day, rather than the current maximum 12 hours, under each pari-mutuel permit. Their maximum bets would be raised from $5 to no limit. Tampa Bay Downs is among the pari-mutuels that would benefit from this change.

Regarding the slots for Hialeah, track president John Brunetti Sr. said April 20 he would “need to see the law and wait until it is enacted” before he would comment on possible future plans for racing and a casino. In this year’s legislative session, which is scheduled to end on April 30, Hialeah Park has been unsuccessful in efforts to restore its Thoroughbred permit and the assignment of Thoroughbred racing dates. Instead under its Quarter Horse permit, Hialeah would be able to run up to half its races as Thoroughbred races. Hialeah held its first Quarter Horse meet between Nov. 28, 2009 and Feb. 3.

Rep. Esteban (Steve) Bovo, R-Hialeah, said he told lobbyists for Hialeah Park that “this year, it was not realistic to try to get changes for restoring the Thoroughbred permit and regulated racing dates.”

“I felt there would be no traction for anything beyond what various parties worked hard to craft last year, and continued with this year,” Bovo said, adding that he was uncertain if there would be sufficient time to pass additional gaming legislation during the current session. Still, he said he thought the bill is a good one.

“I think this new law is very positive for Hialeah Park,” said Bovo, a former marketing director for the track.

Hialeah held its last Thoroughbred meet in 2001. Two years later the Florida Department of Pari-Mutuel Wagering revoked its permit. Under a state law a license must be revoked if a Thoroughbred track does not race for two consecutive years.

Brunetti estimates he’s spent $12 million to renovate Hialeah Park and had an operating loss of as much as $3 million during its 40-day Quarter Horse meet.

This year’s law would allow Hialeah Park to race as few as 20 days during the 2010-2011 fiscal year that begins this July 1.

Hialeah Park would need to run at least eight races per day. Under this year’s law, it would not need permission from other pari-mutuels to run up to half its program as Thoroughbred races and can offer Thoroughbred simulcasts without permission from other pari-mutuels.

But Brunetti said: “I am not talking about any plans and will not spend another penny (on renovations) until something is final in Tallahassee. When I see it, I will believe it.”

On the Bay

The bill does not permit Tampa Bay Downs, which is in Oldsmar, several miles north of Tampa, and pari-mutuels outside Miami-Dade and Broward to have Class II bingo-style slot machines. Adding those machines has been a goal of Tampa Bay Downs and the state’s Greyhound tracks and jai-alai frontons.

However, the bill allows the legislature beginning in 2015 to consider letting counties other than Broward and Miami-Dade vote on whether to permit pari-mutuels in their jurisdictions to add bingo-style slots.

“Other than the changes in poker, there is nothing significant in it for us,” said Peter Berube, Tampa Bay Downs’ general manager. “We will be working to state our case over the next five years.”

For the next five years, the bill gives the Seminoles the exclusive right to have blackjack and baccarat in Florida. It will be able to have those games at five of its seven casinos in the state. It has them at three casinos. The exclusivity on blackjack was among the key factors in working out the Seminole compact and the pari-mutuel changes that were tied to it. The compact requires the Seminoles to pay the state government a minimum of $1 billion, from its gaming revenues, over the next five years. In addition, the $287 million from gaming revenues that the Seminoles have paid since 2007 would be taken from an escrow fund and transferred to the state treasury.

That payment would help cut into a $3.2 billion budget deficit that Florida is projecting for its fiscal year that begins July 1, 2010. The urgency of reducing that deficit led Crist and the legislature to step up their efforts to resolve the Seminole gaming issue.

The Seminoles began adding blackjack and baccarat  in 2008, under provisions of a compact they signed with Crist in 2007. The Supreme Court of Florida ruled that compact was illegal because the legislature did not approve it.

The pari-mutuel provisions of this year’s bill are identical to what the legislature passed last year and Crist signed into law. That law was not enacted because of a subsequent dispute over the bill’s provisions related to the Seminole casinos. Legisative leaders agreed to the terms of the new compact on April 2. Crist and the Seminoles agreed to it on April 6.

The Seminoles’ payments to the state, from slot machines and card games, could be higher than $200 million a year if their revenues exceed designated amounts. The compact covers blackjack and baccarat for five years and their other games for 20 years. The tribe would be able to reduce or halt some of its payments if the state allows pari-mutuels to add types of casino games—such as blackjack and baccarat in Miami-Dade and Broward or slot machines in other counties.

Still, Gulfstream “is very appreciative for what the legislature and all the parties have done,” said Marc Dunbar, an attorney who represents that track.

“We have some changes (slots tax rate and poker) that will help operations and help race purses and breeders’ awards,” said Dunbar, a partner in the Pennington Law Firm in Tallahassee. “Gulfstream is interested in night racing. Five years down the road, we could get some other things.”

This year’s bill allows the legislature to decide as soon as next year whether each pari-mutuel outside the two South Florida counties could install up to 350 Instant Racing machines, which look like slot machines but are different because the outcome is determined by the results of archived horse races.

But Berube said Instant Racing machines “are not attractive, and are not the viable product that are now on the market.”

He added: “What is passing this year does not threaten our short-term survival. But in the long run it does, absolutely.”

Berube said ontrack handle is down 14%, from 2008-2009, for the track’s meet that began on Dec. 12 and will run through May 2. He attributed the decline to the economy and the unseasonably cold and wet weather in the Tampa Bay area in January and February.

“The flip side is how the export has held up,” he said.

Data from the Florida Division of Pari-Mutuel Wagering show that wagering in Florida on Tampa Bay Downs’ export signals during the first three months of 2010 was $40.7 million. That is a drop of just 7% from $43.8 million during the same period in 2009.

The Senate is considering a bill that would eliminate the 10% tax on poker room revenues for pari-mutuels outside Broward and Miami-Dade, but as of April 20, a similar bill had not been introduced in the House.

“There is a sentiment to try to do something for those that were left out of this year’s gains,” Berube said.
 



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